The ACT writes:
"Cycling to work has made an important economic contribution to the cycle industry, with annual retail sales via the program estimated at £120m, delivered through more than 2,250 retail outlets.
However, the number of employees buying into cycling to work has slowed down, a trend largely attributed to the clarification of FMV (fair market valuation) that must be applied to each C2W customer at the end of their hire period. The recent announcement that VAT will be chargeable on cycling to work purchases from 2012 has lead to further negative speculation, fuelling the confusion surrounding the scheme.
The ACT’s confidence in the growth of cycling to work can be summarised in ‘WorkRiders’, a new cycle to work facilitator, dedicated to the independent sector and focused on the original intention of the 1999 legislation.
WorkRiders MD Martin Pickering and Tony Jones, on behalf of ACT, explain how WorkRiders will be influential in increasing the numbers of employees cycling to work.
How does WorkRiders differ from other cycle to work facilitators?
MP: WorkRiders is similar to all other programs in that we conform strictly to the guidance provided by HMRC, DfT and OFT. Our USP is in the process and business model. WorkRiders will deliver cycling to work as was originally intended; we will provide employers and employees with an easy, tax efficient route to start cycling to work with the help of their local independent retailer.
How will you improve upon the schemes already in the C2W market?
MP: Simplification and cost reduction. It was never intended that retailers should fund cycling to work and we will change that perception. WorkRiders will remove any burden from the retailer and they will be able to complete cycling to work sales like any other transaction, at a total cost of 16 pence. No more speculative quotations or sales, the need to take refundable deposits, or the uncertainty about receiving final payments.
Employees will benefit from an immediate purchase and collection of goods with no additional costs to the retailer.
Employees will have the choice of any goods in store, irrespective of price and retail promotions. WorkRiders will be the cheapest route for employees to start cycling to work, providing additional benefits for employers, saving them money and a streamlined process, to happier, healthier employees.
So how does WorkRiders deliver these benefits?
MP: WorkRiders and Eemployers contract into a program which will supply the employee with a Workriders Payment card. The card will be valid to a value agreed between the employer and employee and may be used in any WorkRider Authorised Retailer in the same way as any Visa or Mastercard. They simply select the bike and safety goods they want and pay on site. The retailer will receive payment confirmation as part of a standard debit card type transaction and payment receipt into the retailer’s bank can be as quick as the next working day.
What’s ACT’s role in the WorkRiders program?
MP: The ACT’s endorsement and support is critical. The ACT has been concerned about the confusion surrounding FMV and the VAT clarification, plus the ongoing viability of retailers funding schemes.WorkRiders partnership with ACT will engage up to 2,500 specialist cycle shops, empowering them to develop cycling to work and their own customer base, with free national promotion for all. ActSmart will be our interface with the trade, and through a special pricing arrangement, we will remove the costs incurred by retailers under existing schemes, to ACT members.
Why is the ACT partnering WorkRiders?
TJ: The ACT has received numerous requests to initiate a cycle to work program, the primary aim being to reduce costs to the retailer, but we are a small business support organisation, not an employer facing business. Our skill is in engaging the best partner to deliver for our members and WorkRiders ticks every box for retailers and employees and is the obvious choice for employers.
Will WorkRiders increase the IBD’s share of the cycling to work market?
TJ: Without a doubt. National retailers are already operating in this space, promoting the size of their network as a leading benefit to win tenders. In reality a network of 2,000 specialist retailers, supplying the widest possible product choice, staffed by caring owner operators and technically qualified mechanics, with the best workshops and after sales service you could ask for, is the obvious choice for every employer and employee.
Large national retailers recognise the strength of IBDs, that’s why they are recruiting independents to supplement their cycle to work network in an effort to win employer tenders. This of course is at a cost to the IBD, which significantly impacts on their trading margins.
Is there still capacity for cycling to work to grow 12 years on from legislation?
TJ: There is enormous capacity. Cycle usage remains very low in the UK and cycle sales have been depressed throughout 2011, in line with other big ticket, considered purchases. Price is a bigger barrier than ever to entry. Recent growth in cycling has been dependent upon a small, gradually growing group of committed cyclists investing in cycling as a lifestyle and cycling to work provides the best incentive for the UK population to adopt cycling on a much wider scale. Research over the past year identified a frightening lack of awareness and understanding of the cycle to work schemes, there is huge potential to get more employees cycling to work.
So what part can retailers play here?
MP: The recruitment and education of local businesses is a crucial role for independent retailers and suppliers, who have for too long been left on the sidelines. WorkRiders will deliver an easy-to-use, low cost process for everybody to be a part of. The retailers are the local champions and need to engage their regional businesses. Our aim is to get every community in the UK cycling to work with their local independent retailer at the hub of activity.
TJ: Any independent retailer with internet access in store can enrol as a WorkRiders Authorised Retailer. I recommend that all independent retailers sign up today at www.workriders.co.uk. You can join ACT at www.actsmart.biz and negate administration costs of five per cent for non ACT members.
All retailers should update their promotional listings at www.thecyclingexperts.co.uk to fully reflect their individual offering. The future of cycling to work is bright for independents thanks to WorkRiders."
Find out more here.